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DECREE

On a number of policies to support and encourage the development of cooperatives

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the November 26, 2003 Law on Cooperatives;

At the proposal of the Minister of Planning and Investment,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- Scope of regulation

This Decree provides for a number of policies to support and encourage the development of cooperatives regarding the establishment; training; land; finance; credit; trade promotion; technological application; infrastructure investment in service of production of cooperatives and life of cooperative members, and participation in socio-economic development programs.

Article 2.- Objects of application

1. Cooperatives and unions of cooperatives (hereinafter referred collectively to as cooperatives) that have registered their operation under the 1996 Law on Cooperatives, and additionally registered their charters under the 2003 Law on Cooperatives.

2. Cooperatives set up and registering their operation under the 2003 Law on Cooperatives.

Chapter II

CONTENTS OF POLICIES

Article 3.- Supporting and encouraging the establishment of cooperatives

1. For to be-established cooperatives, their founding members shall be supported in:

a/ Information and knowledge on cooperatives;

b/ Consultancy services on the formulation of cooperative charters, completion of procedures for establishment, business registration and operation organization of cooperatives.

2. The People's Committees of urban/rural districts and provincial towns and cities (referred collectively to as district-level) shall consider and decide on the support on the basis of the founding members' requests and certification of the People's Committees of communes, wards or townships (referred collectively to as commune-level) where the cooperatives are to be established.

Article 4.- Training

1. The following subjects in cooperatives shall be entitled to training:

a/ Holders of Managing Board, Management Board, Control Board and chief accountant titles;

b/ Cooperative members performing professional and technical jobs in cooperatives.

2. Holders of cooperative titles defined at Point a, Clause 1 of this Article, when participating in training, shall be provided with the following supports:

a/ Return tickets by public traffic means (excluding air fares) from cooperatives' offices to training venues;

b/ Funds for purchase of training documents;

c/ Expenses for organization and management of the training courses; renting of training halls; remunerations for trainers; field visits, surveys.

3. For holders of titles in agricultural, forestry, fishery and salt-making cooperatives (hereinafter referred collectively to as agricultural cooperatives) defined at Point a, Clause 1 of this Article, apart from the supports specified in Clause 2 of this Article, they shall also be provided with 50% of meal and accommodation expenses charged by training establishments.

4. The subjects defined in Clause 1 of this Article, when being sent by cooperatives to training courses (formal or in-service) in universities, colleges, intermediate vocational schools or job-training schools, shall be supported with at least 50% of training fees payable according to the latter's regulations, and at the same time, must meet the following conditions:

a/ Being not older than 40 years;

b/ Fully meeting the enrolment conditions set by training establishments;

c/ Possessing Managing Boards' decisions on sending them to training courses;

d/ Having made written commitments to work for cooperatives for at least 5 years after graduation.

Provincial/municipal People's Committees shall specify the support levels for these subjects.

5. Funds for the supports stated in Clause 1, Article 3, and Clauses 2, 3 and 4, Article 4, of this Decree shall come from local annual budgets, with central budget supports and other lawful sources.

The Ministry of Finance shall provide specific guidance on support levels, financial mechanisms in support of founding members of to be-established cooperatives and eligible trainees from cooperatives.

6. The Ministry of Planning and Investment shall sum up training demands and plans of cooperatives nationwide and allocate funds from annual state budgets to ministries, branches and provincial/municipal People's Committees for implementation of the plans.

Article 5.- Land

1. For agricultural cooperatives:

a/ Cooperatives that wish to have land for construction of working offices, warehouses, drying yards, or service establishments in direct service of cooperative members engaged in agricultural or forestry production, aquaculture or salt-making but have not yet been assigned land shall carry out procedures to request land assignment. Provincial-level People's Committees shall base themselves on local land funds to consider and decide on land assignment without collection of land use levies and grant land use right certificates to cooperatives;

b/ Cooperatives that are using land for construction of working offices, warehouses, drying yards, or service establishments in direct service of agricultural or forestry production, aquaculture or salt-making shall be granted land use right certificates according to the provisions of Article 53 of the Government's Decree No. 181/2004/ND-CP of October 29, 2004, on implementation of the Land Law;

c/ Apart from the acreage of land assigned without collection of land use levies, agricultural cooperatives shall also be assigned land with collection of land use levies or leased land with annual payment of land rents according to the provisions of land law, and enjoy preferences on exemption from or reduction of land use levies or land rents according to the Government's regulations;

d/ The State encourages and creates favorable conditions for cooperatives to sub-rent and lawfully use land of organizations or individuals for production/business development.

2. For non-agricultural cooperatives:

a/ Cooperatives may choose the form of land assignment with collection of land use levies or lease of land with annual payment of land rents according to the provisions of land law;

b/ The acreage of land rented with annual payment of land rents by cooperatives in service of construction of production/business establishments and direct provision of services to cooperative members under projects shall be considered and decided by competent state bodies according to the provisions of investment, construction and land law;

c/ In cases where land is being used by cooperatives without land use right certificates, the cooperatives shall be considered and granted such certificates according to the provisions of Article 53 of the Government's Decree No. 181/2004/ND-CP of October 29, 2004, on implementation of the Land Law.

Article 6.- Taxes

1. Cooperatives shall enjoy preferences on enterprise income tax for incomes generated from the provision of services for production/business activities of cooperative members according to the provisions of tax law.

2. For agricultural cooperatives, apart from preferences defined in Clause 1 of this Article, they shall also be exempt from enterprise income tax for incomes generated from the provision of services in direct support of cooperative members' life.

Article 7.- Fund in support of development of cooperatives

1. The fund in support of development of cooperatives is set up under the provisions of Point a, Clause 1, Article 3 of the 2003 Law on Cooperatives.

2. The Ministry of Finance shall assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment, concerned ministries and branches, and the Vietnam Union of Cooperatives in, formulating a scheme on setting up a fund in support of development of cooperatives, then submit it to the Prime Minister for decision.

Article 8.- Credit

1. Cooperatives that have new investment projects or investment projects on expansion of production/business activities may borrow the State's development investment credit capital from the Development Assistance Fund according to the provisions of the Government's Decree No. 106/2004/ND-CP of April 1, 2004, on the State's development investment credit, and Decree No. 20/2005/ND-CP of February 28, 2005, supplementing the list of projects eligible for the State's development investment credit capital under Decree No. 106/2004/ND-CP.

2. For cooperatives that have investment projects on production, trading or export eligible for investment preferences, they shall enjoy investment preferences under the Government's Decree No. 51/1999/ND-CP of July 8, 1999, detailing the implementation of (amended) Domestic Investment Promotion Law No. 03/1998/QH10.

3. For cooperatives that wish to borrow capital from credit institutions for investment in new projects, investment in upgrading or expansion of production/business activities, or provision of services for economic development and improvement of cooperative members' life, they shall be facilitated by credit institutions to borrow capital and apply loan guarantee forms suitable to cooperative economy. The provision of loans shall comply with current regulations. Cooperatives engaged in agricultural and rural domains shall borrow capital from credit institutions according to current regulations on agricultural and rural credit policies.

Article 9.- Supporting trade promotion activities

For exports production cooperatives that are ineligible for funding supports from the key national trade promotion program, if having trade promotion projects approved by competent authorities, they shall be supported with 50% of expenses according to the regulations of the key national trade promotion program for the following activities:

1. Trade information, export promotion information.

2. Export consultancy.

3. Training for raising of exporting capability and skills.

4. Participation in export goods fairs or exhibitions.

5. Popularization of product brands.

Article 10.- Supporting the application and renewal of technologies and raising of technological levels; agricultural, fishery and industrial promotion

1. Cooperatives that have projects on application, renewal of technologies or raising of technological levels may borrow medium- or long-term capital from the National Scientific and Technological Development Fund or the scientific and technological development funds of ministries, branches or localities.

2. Cooperatives organizing training courses for cooperative members to acquire new technologies belonging to the program on formulation of models for scientific and technological application and transfer in service of rural and mountainous socio-economic development, shall be supported with 100% of training expenses.

3. Cooperatives shall enjoy agricultural, fishery and industrial promotion policies under the Government's Decree No. 56/2005/ND-CP of April 26, 2005, on agricultural and fishery promotion, and Decree No. 134/2004/ND-CP of June 9, 2004, on encouraging the development of rural industry.

Article 11.- Supporting cooperatives to invest in infrastructure in service of production and life of cooperative members and to participate in socio-economic development programs

1. Cooperatives shall be supported to:

a/ Build infrastructure in service of production/business of cooperatives and life of cooperative members;

b/ Build industrial clusters and rural craft-village clusters for production and business development.

2. Cooperatives shall be prioritized to participate in the following socio-economic development programs:

a/ Building infrastructure works in localities and managing the works after their completion, including those serving the development of industrial clusters and rural craft-village clusters;

b/ Other socio-economic development projects and programs in localities, suitable to cooperatives' capability.

3. Order and procedures for receiving supports or taking priority:

a/ Annually, cooperatives must take initiative in registering with local agencies managing socio-economic development programs their demands and capability for executing projects under the target programs on socio-economic development, hunger elimination and poverty alleviation so as to be provided with supports or prioritized to participate therein;

b/ Target program-managing agencies shall have to publicly notify districts and communes of the scope, objects and conditions of each program; receive, consider and approve cooperatives' applications for participation in the programs; assist cooperatives in carrying out necessary procedures for participation in the programs; examine, supervise and settle problems arising in the course of execution of projects assigned to cooperatives.

Chapter III

IMPLEMENTATION PROVISIONS

Article 12.- Implementation effect

This Decree takes effect 15 days after its publication in "CONG BAO" and replaces the Government's Decree No. 15/CP of February 21, 1997, on policies to encourage the development of cooperatives.

Article 13.- Implementation responsibilities

1. The Ministries of Finance; Planning and Investment; Trade; Science and Technology; Natural Resources and Environment; and Education and Training, and the State Bank of Vietnam shall base themselves on their assigned functions, tasks and powers to guide the implementation of this Decree.

2. The Ministry of Planning and Investment shall have to monitor and urge the implementation of this Decree.

3. Ministers, heads of ministerial-level agencies, heads of Government-attached agencies, and presidents of provincial/municipal People's Committees shall have to implement this Decree.